Downtown Subway back in the game

By Mike Barrett

Published: Thursday, January 10, 2013 at 02:08 PM.

A back-and-forth bidding war between two groups striving to buy a city-owned building in downtown Gastonia shows no sign of ending.

The city’s upset bid process, somewhat like an auction, means a new offer can be considered at each stage, provided it is at least 5 percent higher than the previous one. That means the money the city receives for the property at 190 S. South St. will only go up, should buyer interest remain strong.

A City Council subcommittee this week recommended accepting the latest upset bid from Clark Properties, with a few tweaks. The full City Council is expected to approve that offer when it meets Tuesday.

Gastonia leaders are on a widespread quest to purge unneeded, city-owned real estate and get it back on the tax rolls. They have shown they are willing to use unconventional means of doing that, such as financing the purchase of certain property rather than making the buyer get a loan from a bank.

Clark Properties owns two other Subway franchises in the area and wants to open a third one in the corner storefront at 190 S. South St., along West Franklin Boulevard. Its standing offer is to buy the two-story building for $242,650, with the city financing the purchase over 10 years.

That offer would upset a $212,000 bid, plus $19,000 in lieu of taxes, made last month by Family Service Inc. The Gaston County nonprofit provides aid such as family counseling and domestic violence support, and wants to make the building its new home.

Family Service’s bid topped the initial, $201,000 offer from Clark Properties that was accepted by the city in November.

A back-and-forth bidding war between two groups striving to buy a city-owned building in downtown Gastonia shows no sign of ending.

The city’s upset bid process, somewhat like an auction, means a new offer can be considered at each stage, provided it is at least 5 percent higher than the previous one. That means the money the city receives for the property at 190 S. South St. will only go up, should buyer interest remain strong.

A City Council subcommittee this week recommended accepting the latest upset bid from Clark Properties, with a few tweaks. The full City Council is expected to approve that offer when it meets Tuesday.

Gastonia leaders are on a widespread quest to purge unneeded, city-owned real estate and get it back on the tax rolls. They have shown they are willing to use unconventional means of doing that, such as financing the purchase of certain property rather than making the buyer get a loan from a bank.

Clark Properties owns two other Subway franchises in the area and wants to open a third one in the corner storefront at 190 S. South St., along West Franklin Boulevard. Its standing offer is to buy the two-story building for $242,650, with the city financing the purchase over 10 years.

That offer would upset a $212,000 bid, plus $19,000 in lieu of taxes, made last month by Family Service Inc. The Gaston County nonprofit provides aid such as family counseling and domestic violence support, and wants to make the building its new home.

Family Service’s bid topped the initial, $201,000 offer from Clark Properties that was accepted by the city in November.

So far, the financing terms offered to the two entities have varied. On Tuesday, the subcommittee recommended those terms should be the same for each. Clark Properties would be offered an interest rate of prime minus 0.25 percent for the first five years, and prime – not to exceed 6 percent – for the second five years.

One of the city’s interests, if possible, is to retain the barber shop and jewel shop that occupy the building’s two retail spaces now. Family Service has offered to extend five-year leases to those tenants if its bid becomes final.

Clark Properties would need the jewel shop to relocate – possibly to a kiosk elsewhere in the building – to make way for the Subway. But the jewel shop owner has already announced his plans to retire soon.

Before Tuesday’s meeting, city staff said they plan to get further information from both the barber shop and jewel shop owners about their long-term business plans.

You can reach Michael Barrett at 704-869-1826 or twitter.com/GazetteMike.